Covered Interest Arbitrage Illustration 4
If Euro/USD Spot 0.8125
Euro/USD 0.8135 9 month forward
Euro Interest Rate 2.5% per annum
Dollar Interest Rate 2% per annum
Find Arbitrage possibilities.
(Ans.: Borrow USD, gain 2,498 USD per million)
Covered Interest Arbitrage Illustration 4
If Euro/USD Spot 0.8125
Euro/USD 0.8135 9 month forward
Euro Interest Rate 2.5% per annum
Dollar Interest Rate 2% per annum
Find Arbitrage possibilities.
(Ans.: Borrow USD, gain 2,498 USD per million)
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